TMI Blog2011 (2) TMI 1449X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in confirming the action of Assessing Officer in reducing the amount of investment subsidy of ₹ 20,00,000/- received by the assessee form the opening WDV of assets and thereby reducing the depreciation by ₹ 2,70,999/-. 3. Facts of the case in brief are that the assessee company, engaged in the business of manufacturing and trading of ayurvedic medicines and cosmetics, has received an amount of ₹ 20,00,000 as investment subsidy released by the government of Andhra Pradesh. When the Assessing Officer proposed to reduce this amount of subsidy from the written down value of the assets or treat the same as revenue receipt, in terms of S.43(1) of the Income Tax Act, 1961, it was explained by the assessee that the subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isri Extractions Ltd. V/s. ACIT (122 ITD 428), besides the decisions relied upon by the assessee before the lower authorities. The learned Departmental Representative, on the other hand, strongly relied on the orders of the lower authorities and submitted that the disallowance made by the Assessing Officer and confirmed by the CIT(A) be sustained. 5. We have considered the rival submissions and perused the orders of the lower authorities. We find from the orders of the lower authorities that the assessee has received the subsidy in question in terms of the policy document titled Target-2000, New Industrial Policy, 1995 Scheme, by way of state incentives for setting up of new industries. The quantum of subsidy has been worked out at 20% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase ld. Commissioner of Income-tax(Appeals) has erred in confirming the disallowance of depreciation of ₹ 6,85,662/- made by Assessing Officer by restricting the claim of depreciation on electrical fittings at 15% instead of 25% despite the fact that these electrical fittings were included in the block of assets carrying rate of depreciation of 25% prior to prescription of separate rate of 15% depreciation on electrical fittings. 7. Facts of the case in relation to this ground are that the Assessing Officer has worked out the disallowance in respect of electrical fittings at 15% as against the claim of the assessee worked out at 25%. This resulted in disallowance of depreciation claimed by the assessee, to the extent of ₹ 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nery, are inseparable part of the plant and machinery and have to be classified as plant and machinery in the block of assets eligible for depreciation at 25%. We find that the Assessing Officer held the view that electrical fittings have never been considered as a part of plant and machinery under the depreciation schedule for tangible assets. He also noted that the assessee itself, vide Annexure C to Form 3CD report has claimed depreciation on electrical fittings at 15% only, in respect of Personal Care Product Division. We find no infirmity in the action of the Assessing Officer in restricting the depreciation in respect of electrical fittings to 15% as against 25% claimed by the assessee, which is strictly in conformity with the specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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